Rich tax cap amendment ‘extremely irresponsible’, P&R warns
Policy & Resources has called Deputy Chris Le Tissier’s tax cap amendment 'extremely irresponsible', adding that it would only serve to reduce the island’s income in the long-term, as well as put more pressure on the average taxpayer.
A spokesman for the committee said that residents with income from non-Guernsey sources of at least £750,000, or £1.5m on their worldwide income, could elect to pay the capped amount of tax.
‘The 2024 Budget proposed increasing the non-local income cap to £160,000 and the worldwide cap to £320,000, which is already higher than some of our key competitor jurisdictions,’ a P&R spokesman said.
‘The small number of Guernsey residents for whom these caps apply choose to be tax resident here, and contribute a very significant amount of tax to fund local services, but they can choose to be resident elsewhere.’
He added that removal of the cap would be a major disincentive to newcomers to the island with income at this level.
‘Ultimately that would only serve to reduce the States’ revenues and put more pressure on the rest of the taxpaying public.
‘One person paying tax at the current worldwide cap level is roughly equivalent to the amount paid by 55 taxpayers on median earnings.’
Concern over Deputy Le Tissier’s amendment was also expressed by open market property experts.
Swoffers head of open market Sophie Ephgrave said that by creating the tax cap, the States recognised the financial benefit wealthy individuals made to Guernsey on a long-term basis, and so to remove it would appear to be counter-productive.
‘Many other jurisdictions are offering incentives to attract high net worth individuals, so Guernsey needs to remain competitive,’ she said.
Savills director Nick Paluch said that Guernsey needed to fight to be as competitive as possible.
‘When dealing with high net worth individuals, how much tax they will be paying is always something that is factored in.
'They will also look at Jersey, the Isle of Man and other jurisdictions as possible places to live.
‘It’s an important consideration and we need to make sure we are the number one choice, the benefit that these individuals bring to the island bring through their charitable and entrepreneurial activity is something that cannot be measured.
‘We always say that the States messes with the open market at its peril.’
